South Africa 40 Spread Betting
Where Can I Spread Bet on the South Africa 40?
You can currently spread bet on the South Africa 40 and other Indices at:
» CMC Markets
The South Africa 40 index may be available with other brokers.
Where Can I Trade the South Africa 40 for Free?
It depends upon what you mean by free. If you are looking for a free spread betting platform then don't forget that in the UK spread betting is tax free*
You can also spread bet on the South Africa 40 and other index markets commission free and with no brokers' fees with IG Index.
Spread Betting on South African Companies
If you are interesting in spread betting on South African companies, we have some examples below.
We simply talk you through the most popular spread betting questions for that South African company:
||South African Shares
Spread Betting Guides »
How to Spread Bet on the South Africa 40?
As with a wide range of financial markets, you are able to place a spread bet on stock market indices, such as the South Africa 40, to either increase or decrease.
Looking at a spread betting website like IGIndex, we can see that they are currently valuing the South Africa 40 December Futures market at 32261 - 32283. This means an investor can spread bet on the South Africa 40 index:
Closing higher than 32283, or
Closing lower than 32261
On the expiry date for this 'December' market, 20-Dec-12.
When spread trading on the South Africa 40 index you trade in £x per point. So, should you decide to risk £5 per point and the South Africa 40 moves 24 points then that would change your bottom line by £120. £5 per point x 24 points = £120.
For short term trading on a range of indices also see Indices Rolling Daily Spread Betting.
South Africa 40 Futures - Index Spread Trading Example
Now, if we consider the above spread of 32261 - 32283 and assume that:
Then you could decide that you want to go long of the market at 32283 for a stake of £2 per point.
- You have done your market analysis, and
- Your analysis leads you to think that the South Africa 40 index will settle higher than 32283 by 20-Dec-12
So, you gain £2 for every point that the South Africa 40 index pushes above 32283. Having said that, you will lose £2 for every point that the South Africa 40 market falls below 32283.
Considering this from another angle, if you were to buy a spread bet then your profits (or losses) are worked out by taking the difference between the final price of the market and the initial price you bought the spread at. You then multiply that difference in price by the stake.
With that in mind, if, on the expiry date, the South Africa 40 market settled higher at 32348, then:
Profit = (Final Price - Initial Price) x stake
Profit = (32348 - 32283) x £2 per point stake
Profit = 65 x £2 per point stake
Profit = £130.00 profit
Trading indices, whether by spread betting or not, is not always straightforward. In this case, you wanted the South African stock market index to rise. Naturally, the index might go down.
If the South African stock market had fallen and the South Africa 40 closed lower at 32212, you would end up making a loss and losing on this spread bet.
Loss = (Final Price - Initial Price) x stake
Loss = (32212 - 32283) x £2 per point stake
Loss = -71 x £2 per point stake
Loss = -£142.00 loss
Note: South Africa 40 December Futures spread betting market taken as of 10-Oct-11.
Where Can I Find Free Live South Africa 40 Prices?
If you want to access quick live market information then you could do worse than opening an account with a spread betting company like IG Index.
Also, you don't have to trade with them, if you just open an account (which is free to do) then their data is free. The catch? You'll get the odd email or letter from them. In the example below you can also see that their free charts are also useful.
South Africa 40 Charts Example
As mentioned above, you can get free charts with spread betting companies like IG.
As with most candlestick charts, you can alter the charts to see market data by the minute, by the hour, by the week etc. There are also a number of other settings designed to help you analyse the markets.
Example Stock Market Charts:
How to Spread Bet on South African Shares
If you're going to speculate on South African firms then one option could be spread betting on the African Rainbow Minerals share price.
Looking at a financial spread betting site like Inter Trader, you can see that they are currently pricing the African Rainbow Minerals Rolling Daily market at 18,906c - 18,970c. Therefore, you could spread bet on the African Rainbow Minerals shares:
Rising above 18,970c, or
Falling below 18,906c
When financial spread betting on South African equities you trade in £x per cent, where a cent is 1 South African cent. So, if you invest £3 per cent and the African Rainbow Minerals share price moves 28c then that would make a difference to your profit/loss of £84. £3 per cent x 28c = £84.
Note that you are also able to trade this market in Euros or Dollars, e.g. $x per cent.
Rolling Daily Shares Markets
It's important to note that this is a Rolling Daily Market and so it does not have a set closing date. You do not have to close your position, should it still be open at the end of the trading day, it just rolls over into the next day.
Should your spread bet roll over, if you are speculating that the market will:
Go up - then you'll pay a small overnight financing fee, or
Go down - then you will often receive a small payment to your account
For a worked example please see Rolling Daily Spread Betting.
African Rainbow Minerals Rolling Daily - South African Equities Trading Example
Now, if you consider the spread of 18,906c - 18,970c and assume that:
Then you might decide that you are going to buy a spread bet at 18,970c and invest £1 per cent.
- You've completed your stock market research, and
- You feel that the African Rainbow Minerals share price is likely to push above 18,970c
This means that you win £1 for every cent that the African Rainbow Minerals shares go higher than 18,970c. Having said that, you will make a loss of £1 for every cent that the African Rainbow Minerals market goes below 18,970c.
Looking at this from another angle, if you were to ‘Buy’ a spread bet then your P&L is calculated by taking the difference between the settlement price of the market and the price you bought the market at. You then multiply that difference in price by your stake.
As a result, if the shares started to rise you might decide to close your position to lock in your profit.
So if the market increased then the spread, set by the spread betting company, could change to 19,122c - 19,186c. In order to close your spread bet you would sell at 19,122c. Accordingly, with the same £1 stake:
Your profits (or losses) = (Settlement Value - Initial Value) x stake
Your profits (or losses) = (19,122c - 18,970c) x £1 per cent stake
Your profits (or losses) = 152c x £1 per cent stake
Your profits (or losses) = £152 profit
Financial spread trading on shares can work against you. In this case, you had bet that the share price would go up. Nevertheless, the share price could fall.
If the African Rainbow Minerals stock fell then you could choose to close your spread bet to stop any further losses.
If the spread fell to 18,835c - 18,899c then you would settle your spread bet by selling at 18,835c. Therefore, you would make a loss of:
Your profits (or losses) = (Settlement Value - Initial Value) x stake
Your profits (or losses) = (18,835c - 18,970c) x £1 per cent stake
Your profits (or losses) = -135c x £1 per cent stake
Your profits (or losses) = -£135 loss
Note - African Rainbow Minerals Rolling Daily market accurate as of 20-Mar-13.
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'South Africa 40 Spread Betting' edited by Jenna Cutly, updated 13-Apr-17
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